Zenith IMMF European Capital Growth EUR Acc: Suitability
The Fund would be suitable for those with a long-term investment horizon of a minimum of 5-10 years.
Stockmarket investments (equities) are more volatile than the safer deposit, cash or bonds and so their value is prone to fluctuation. Year on year returns are likely vary more dramatically, possibly delivering negative returns in some years. Conversely, equities can give larger positive returns in some years compared to cash or bonds. Generally, when taken over a long period of time, equities provide a better overall rate of return.
When investing for a short period, stockmarket volatility may be a disadvantage. However, a long-term approach is more likely to deliver strong investment results.
Investing for retirement, as with all investment opportunities, is about balancing performance against risk. The tolerance to risk will depend on a whole range of factors; for example, whether or not other savings exist to fall back on. However, the most important consideration is likely to be age and the period remaining until retirement. Typically, a younger investor may be more likely to invest in equities. As the years pass by, the investor may look to consolidate gains by switching out of equities into less volatile investments such as bonds and cash funds.
The Fund would be appropriate for an aggressive strategy where all investment is allocated to equity funds. An investment horizon of 10 or more years is recommended.
The Fund might be part of a balanced strategy where investment is allocated into a mixture of equities and bonds – say 50/50 with at least 6 years to retirement.
The Fund would not be appropriate for a cautious strategy, 60% bonds and 40% cash or a safe strategy 100% cash.
In addition, the currency will be a consideration and the Fund is bias towards the European stockmarkets.
The Fund should be attractive to a Euro investor because it offers market diversification. A US Dollar investor should consider the Zenith IMMF Equity Growth US Acc.